Consultant helps cities, counties adjust to new Act 10 environment

Posted on March 3, 2013 • Posted in News Articles

Gov. Scott Walker is known nationwide for his hallmark changes to collective bargaining by public employees in 2011. But, two years later another man is quietly influencing the wages of thousands of public workers across the state.

You likely don’t know Charlie Carlson, a charismatic labor expert with 40 years of experience, and his five-person Middleton-based Carlson Dettmann Consulting firm. Yet he’s crossed paths with nearly every human resources director in the state and considers 42 of Wisconsin’s 72 counties his clients.

Carlson’s firm has stepped in to fill a void created by the dissolution of public sector unions that allowed counties and cities to set their own pay scales without bargaining and reset local government wages more in line with the private sector.

The company has earned a lucrative business winning contracts from cities and counties to benchmark current employee wages against comparable private-sector pay. The firm then produces a series of recommendations to bring pay scales more inline with what private sector workers earn for comparable work.

Since Act 10 became law, Carlson has completed at least 12 compensation studies around the state and is sure to have as much work as he can handle in coming years. At about $50,000 per study, the consultant has leveraged political changes to help the firm win nearly $600,000 in contracts, according to a review by Gannett Wisconsin Media.

“I figured that with the economy devastated and tight public sector budgets in 2010, I’d have a pretty quiet life. Then, out of the darkness came Act 10 and life changed,” Carlson said. “My reaction was this really is an opportunity to do it the right way, because I knew the system was broken.”

Wherever Carlson gets hired, from Oshkosh to Wood County, controversy often follows because of the politically charged nature of tying compensation to performance. Employees frequently voice displeasure about being cut out of the process, and left-leaning local council and board members usually accuse Carlson’s recommendations of favoring managers while slashing pay for rank-and-file workers.

“Job studies are nothing new, but what we’re seeing this year is a different animal in terms of methodology and outcome,” said Martha Merrill, a research analyst for the American Federation of State, County and Municipal Employees. “These are done solely by the consultant with input from the city council, and the employees don’t have a voice at the table.”

Meet Charles E. Carlson

Carlson, 66, is an Illinois-native and a 1968 graduate of the University of Illinois. He earned a master’s degree from the University of Wisconsin. He is proud of his work representing UW-Madison in teacher contracts negotiations and vigorously defends his position as a fair consultant of employee wages. Carlson works with cities and counties from San Francisco to Washington D.C., but does most of his business in Wisconsin.

He told Gannett Wisconsin Media the collective bargaining process was politicized and became more “interest arbitration,” in which hardened positions by unions and employers clashed in an unsustainable cycle.

When he’s hired by a county or city, Carlson obtains questionnaires from employees about their roles and gathers comparable wages in nearby public and private sector jobs.

Tensions run high when Carlson decides an employee is overvalued.

“No employee likes to see us arrive and declare their position is 20 percent overpaid,” he said. “They usually understand that it’s true, but they don’t like that I’m saying it because it makes them feel uncomfortable.”

Most employers choose to “red-circle” employees Carlson says are overpaid so they don’t get pay cuts, but they won’t get raises until the system catches up. New hires in that position would also start at the lower wage.

In Oshkosh, where the firm was awarded a $65,000 contract, the study recommended a pay freeze for 190 city employees — 172 general employees and 18 managers and professionals — who earned paid more than the average private-sector wage for their jobs. The study said 52 of those employees earned more than 120 percent of the average public-sector pay for their jobs.

Across the state, Carlson said, top managers, such as highway superintendents, are substantially underpaid compared to their private-sector counterparts. Pay for mid-level skilled workers is usually competitive in the market, he said.

“Where we were paying more relative to the private sector is the lower-paid jobs, particularly when you consider the benefit loads on those positions,” Carlson said.

Carlson also is an advocate for implementing “pay-for-performance” plans in which managers evaluate employees to assign raises based on benchmarks.

Since reputations, personal relationships and messy data gathering are involved, Carlson said his services are valuable to counties and municipalities that, he said, would be “a suicide run” if they tried to do the same work in-house.

“It would be a painful and bloody process and you won’t enjoy the trip,” he said.

Public tax dollars are put to work with the expectation that Carlson will be fair. But the private nature of his job has fueled criticism because evaluations are performed behind closed doors and are hidden as proprietary data interpretation. Carlson said it’s a leap local government takes when it pays for his services.

“If you need heart surgery you don’t ask your surgeon which tools they’re using,” he said. “It was even more private in the past. Unions had their data, management had their data, no one shared, and if you didn’t dispute it nobody looked.”

In his corner

Carlson’s greatest allies are human resources directors working to navigate the new environment in which public employers are able to unilaterally set new pay structures.

John Fitzpatrick, Oshkosh’s director of administrative services, said Carlson’s work takes place within guidelines and goals established by the city or county that hires his firm.

“It’s Carlson’s role to do what the municipality deems appropriate. He’ll provide advice, but it’s up to the county or city to decide where they want to go,” Fitzpatrick said.

After employees get rated at a pay level, they have the opportunity to appeal. Carlson decides most appeals as part of conducting the study.

The Oshkosh Common Council adopted Carlson’s pay plan, 5-2 ,in March 2012 after rejecting workers’ request to delay the a vote to address ongoing concerns about the pay package. The new pay scale, which is heavily weighted to merit raises versus adjustments to the overall wage scale, is expected to save $1 million over the next decade.

Appleton paid Carlson $62,000 last year for a study he delivered in December. He was chosen through a competitive bidding process.

Carlson’s plan, which has yet to be adopted, has been criticized by some members of the common council.

Sandy Behnke, Appleton’s human resources director, said employee backlash in Oshkosh over the city’s study gave Carlson a “black eye” and had Appleton employees nervous before any work began.

“Our employees viewed him as a management guy because he’s been around for so long,” Behnke said. “But he’s very knowledgeable in the law despite being unfairly viewed as anti-union and pro-management.”

Behnke said hiring an outside consultant eases the tension at City Hall.

“I’m already in an adversarial role with the union after years of bargaining and now I’d be in a position against the departments,” Behnke said. “It’s worth the money to have an external person who specializes in this area deal with disputes.”

Suspicion, emotions

The consultant’s booming business has been closely watched by the state chapters of the American Federation of State, County and Municipal Employees — the worker union that has lost nearly half of its members since dues became optional under Act 10.

Martha Merrill, a research analyst at AFSCME in Madison, said wage studies aren’t inherently bad, but the results and the process used by Carlson are disconcerting.

“One of the concerns is the use of private sector data because the Carlson firm considers it proprietary, so we don’t have access to what they gather to see how they make decisions,” Merrill said. “We also have some serious concerns about the difference between public and private sector work and issues finding comparables.”

Carlson’s plans usually implement pay-for-performance raise schedules instead of pay hikes that are based on the length of service that public workers traditionally received.

“Pay decisions will be left up to individual managers,” Merrill said. “Plus, public sectors don’t tend to produce widgets, so there’s a question of setting goals and measuring above-average performance.”

Ed Wagner sits on the Wood County Board of Supervisors, which rejected Carlson’s recommendations after a $70,000 study last year. He’s also president of the Marshfield Common Council, which recently hired Carlson to put together a plan for $20,000.

Wagner is critical of the proprietary nature of the studies, saying they lack the transparency required by other government decisions. He also scoffed at the notion of Carlson handling appeals.

“Our leadership and county management is very conservative and fond of Gov. Walker,” Wagner said. “If you listen to Carlson’s sales pitch you’ll hear him say Act 10 over and over and we seem to have this idea he’ll help us implement what Walker wants us to do.”

Booming business

Carlson has been the foremost player in the wage consulting process in the state for years, but his firm isn’t the only one getting work here.

Four other companies bid on Appleton’s wage study. Three were from Minnesota and one was from Illinois.

Marathon County approved a contract this year with Fox Lawson & Associates of St. Paul. In Fond du Lac County, officials opted to forgo a study and piggybacked on the market analysis Carlson performed under a $45,000 contract with the city of Fond du Lac.

Tom Madsen, administrative coordinator for Shawano County, said the county is considering a wage study contract with the College of Menominee Nation in Keshena to save money.

“Without the union labor contracts we’re all saying, ‘What do we do next?’” Madsen said. “We’re all in the same boat, scrambling for solutions.”


— Nick Penzenstadler: 920-996-7226, or; on Twitter @npenzenstadler

Reposted from The Oshkosh Northwestern